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Stocks up or down after the holiday?


Vietnam stock market experienced a volatile trading week (April 25 – 29) when VN-Index In the first session of the week (April 25), it sometimes dropped more than 80 points, the largest decrease in history. VN-Index closed the first session of the week with a drop of nearly 70 points and tried to recover in the last 4 sessions of the week, the index also recovered more than 56 points. Analysts from securities companies are inclined to say that the downside risk may remain in the short term due to the pessimistic sentiment of investors.

Leaning towards the possibility of market correction

According to KIS Vietnam Securities Joint Stock Company, the downside risk may still remain in the short term due to the pessimistic sentiment of investors. Therefore, investors should wait for the next signals and stand outside to observe.

An expert from SSI Securities Joint Stock Company (SSI) said that the VN-Index extended the recovery momentum in the last day of the frequency (April 29) and conquered the resistance near 1,365 points. In a positive case, VN-Index might continue recovering to the range of 1,377 – 1,380 points.

However, with the medium-term downtrend being maintained, combined with the story of the US Federal Reserve (FED) raising interest rates in the first week of May, VN-Index may face the risk of adjustment. correction.

According to Mirae Asset Securities (Vietnam), after a series of strong declines for 8 consecutive sessions, VN-Index had a recovery span for 4 consecutive sessions, helping the short-term trend to be less negative.

However, the current rally is lacking the support of liquidity, reflected in the average matching volume in 4 recovering sessions below 15,000 billion dong/session.

In the derivatives market, VN30 futures contracts are 1-13 points lower than the base index, showing that traders are still leaning towards the possibility that the market may correct in the near future.

Mirae Asset Securities said that the short-term resistance of the VN-Index is in the range of 1,390 – 1,400 points while the short-term support is in the range of 1,260 – 1,280 points. VN-Index currently has a P/E (an index that measures the relationship between a stock’s market price and earnings per share) of 15.2 times, close to the 10-year average of 15.03 times. . The short term technical signal is at neutral level.

According to SHS Securities Joint Stock Company, the market fell for the 4th week in a row with a slight decrease of 0.9%, the increased demand after the sharp drop on Monday (April 25) helped the VN-Index to recover. recovered in the remaining 3/4 sessions to end the week with a slight decrease. However, there was a decline in liquidity, but in the context of a 4-day holiday, this is quite normal and has happened before.

SHS has a rather positive view with other securities companies when it thinks that technical analysis is also supporting the market’s recovery with the VN-Index still ending the week above the threshold of 1,350 points, so there is still a possibility that the market will recover. The index ability can increase to reach the target in the range of 1,530-1,550 points.

The current risk may only come from investor psychology with the famous saying in the market “sell in may and go away” – sell stocks in May and go out. However, with the fact that in April, the VN-Index decreased by 8.4%, the possibility of further decrease in May is unlikely.

Therefore, in the next trading week from May 4 to May 6, VN-Index may recover to gradually narrow the gap with the index’s next target being the psychological threshold of 1,400 points, SHS stated. opinion.

Regarding market movements last week (April 25 – 29), VN-Index dropped for the 4th consecutive week with a decrease in liquidity compared to the previous week and was the 7th consecutive week lower than the average level of 20 points. the week.

At the end of the trading week, VN-Index decreased by 12.43 points to 1,366.8 points, HNX-Index increased by 6.71 points to 365.83 points. Trading value on HOSE decreased by 23.9% compared to the previous week, with 89,612 billion dong, equivalent to a decrease of 19.9% ​​in volume to 3,094 million shares.

The trading value on the HNX decreased by 19.1% compared to the previous week with 10,312 billion dong, corresponding to the volume decreased by 14.6% to 454 million shares.

In fact, for the whole month of April, VN-Index decreased by 125.35 points compared to the end of March, HNX-Index also decreased by 83.79 points, UPCOM-Index decreased by 12.73 points.

The market dropped sharply in April, in the context of cautious domestic transactions and foreign investors becoming a bright spot. Specifically, foreign investors net bought nearly 4,200 billion dong in April. Before that, foreign investors were net sellers for 8 consecutive months, with a total value of 43,529 billion dong. Last week alone, foreign investors net bought more than 813 billion dong.

Information technology stocks had the biggest drop in the past week with 4.4% of market capitalization as investors took profit strongly, typical codes like FPT down 4.9%, CMG down 6, 3%…

Next is the community utility group with a 3.5% decrease in market capitalization. Typical stocks such as: GAS down 6.1%, POW down 1.1%…

The consumer services group lost 3.2% of market capitalization due to the decline in airline stocks such as VJC down 5.4%, HVN down 0.9%… and retail stocks like MWG falling 5%, DGW down 1.7%…

Consumer goods stocks also dropped 2.2% in market capitalization, mainly due to pillar codes including: VNM down 1.7%, SAB down 5.5%…

The banking industry decreased by 1.7% in capitalization, creating correcting pressure on the general market. These include CTG down 4.8%, BID down 2.9%, TCB down 2.2%, VCB down 1.9%, MBB down 1%… Oil and gas industry dropped 1.9% of capital value chemicals, pharmaceuticals and healthcare down 1.1%, raw materials down 0.6%.

In the opposite direction, the financial sector increased by 1.7% of market capitalization; industry increased by 1.3% of market capitalization.

Many factors are no longer favorable

The Vietnamese stock market’s deep decline is also in line with the world’s stocks, when the markets are facing disadvantages.

Wall Street stocks ended a dismal April on April 29. The main indexes on Wall Street this session all dropped sharply.

Specifically, the Dow Jones Industrial Average fell 2.8% to 32,977.21 points. The S&P 500 fell 3.6% to 4,131.93, and the Nasdaq Composite fell 4.2% to 12,854.80.

Observers said that factors including rising interest rates, some large enterprises reporting business results not as expected and growing concern about the global growth outlook have rattled the stock market. US stocks in April.

For the whole month of April 2022, the Dow Jones Industrial Average fell 4.9% from the previous month, while the S&P 500 lost 8.8% and the Nasdaq Composite lost 13.3%.

This is the largest monthly percentage drop since March 2020 for the Dow Jones and S&P, and the largest for the Nasdaq Composite since October 2008.

Additionally, it was also the worst-performing April for the Dow Jones and S&P 500 since 1970 and the worst month for the Nasdaq Composite since 2000.

The end of April is not very happy, investors will want to look for a recovery in May. But the situation is not looking too favorable for the market from here on.

April’s big drop preceded a period of weakness commonly seen in equities, with the “sell in May and go” mentality officially emerging next week.

The US Federal Reserve (Fed) is expected to double the level of control over record-high inflation in the US next week (from May 2 to 6), while facing a series of shocks including both inside and outside. Experts fear that one day these factors could lead the world’s largest economy to a recession.

The US Federal Open Market Committee (FOMC) will hold its policy meeting on May 3-4, and top officials have signaled strongly that they will raise interest rates by half a percentage point. hundred and announced plans to drastically reduce their debt holdings.

Top Fed officials, including Chairman Jerome Powell, have suggested that a half percentage point increase in interest rates is likely to be agreed at the policy meeting and double the 0.25 percentage point increase that the Fed said. FOMC deployed in March.

The Fed is expected to announce plans to cut trillions of dollars in bonds and mortgage-backed securities it buys to support the economy during the COVID-19 pandemic. This will increase borrowing costs.

Both moves would further tighten lending conditions in the world’s largest economy and potentially eliminate consumer price hikes at rates not seen since the 1980s.

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